VA awards $121.8M energy efficiency contract to NORESCO, LLC for VISN 11 facilities

Contract Overview

Contract Amount: $121,783,828 ($121.8M)

Contractor: Noresco, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2013-07-18

End Date: 2022-10-01

Contract Duration: 3,362 days

Daily Burn Rate: $36.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CL::IGF - CLOSELY ASSOCIATED - THESE REQUIREMENTS HAVE BEEN DEVELOPED FOR VA VISN 11 TO PUT FORTH GOVERNMENT IDENTIFIED ECM PROJECTS AT VISN 11 FACILITIES TO REDUCE ENERGY CONSUMPTION, WATER CONSUMPTION AND ASSOCIATED UTILITY COSTS, AND ENERGY-RELATED OPERATIONS AND MAINTENANCE COSTS.

Place of Performance

Location: MARION, GRANT County, INDIANA, 46952

State: Indiana Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $121.8 million to NORESCO, LLC for work described as: IGF::CL::IGF - CLOSELY ASSOCIATED - THESE REQUIREMENTS HAVE BEEN DEVELOPED FOR VA VISN 11 TO PUT FORTH GOVERNMENT IDENTIFIED ECM PROJECTS AT VISN 11 FACILITIES TO REDUCE ENERGY CONSUMPTION, WATER CONSUMPTION AND ASSOCIATED UTILITY COSTS, AND ENERGY-RELATED OPERATIONS AND MAINTENA… Key points: 1. Contract aims to reduce energy and water consumption across VISN 11 facilities. 2. Focus on energy-related operations and maintenance cost reduction. 3. Long duration of over 3300 days suggests a comprehensive, multi-year project. 4. Firm Fixed Price contract type provides cost certainty for the government. 5. No small business set-aside indicates a focus on large prime contractors. 6. Contract awarded via full and open competition, suggesting broad market participation.

Value Assessment

Rating: good

The contract value of $121.8 million over approximately 9 years represents a significant investment in energy efficiency for the VA. Benchmarking this against similar large-scale energy savings performance contracts (ESPCs) is challenging without specific project scope details. However, the firm-fixed-price nature suggests that the contractor, NORESCO, LLC, has committed to delivering specific outcomes for a set price, which is generally favorable for the government. The long duration implies a comprehensive approach to identifying and implementing energy-saving measures across multiple facilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that the VA sought proposals from all responsible sources. This approach typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The specific number of bidders is not provided, but the open competition suggests a robust process designed to achieve value for money.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices and encouraging innovation as contractors vie for the award. It ensures that the government is not limited to a single provider, increasing the likelihood of securing a cost-effective solution.

Public Impact

Benefits include reduced utility costs for the Department of Veterans Affairs. Services delivered focus on energy and water consumption reduction and operational efficiency. Geographic impact is concentrated within VISN 11 facilities. Workforce implications may include specialized energy efficiency technicians and project managers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to scope creep or evolving needs not fully captured initially.
Firm Fixed Price contracts can sometimes incentivize contractors to cut corners if not properly monitored.
Reliance on a single large contractor for a broad scope of work may limit flexibility.

Positive Signals

Clear objective to reduce energy and water consumption aligns with government sustainability goals.
Firm Fixed Price contract provides budget certainty for the VA.
Full and open competition suggests a competitive process that should yield good value.
Long duration allows for comprehensive implementation and sustained savings.

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to energy efficiency and facility management. Energy Savings Performance Contracts (ESPCs) are a common mechanism for federal agencies to upgrade infrastructure and reduce operating costs without upfront capital investment. The market for ESPCs is competitive, with several large energy service companies (ESCOs) capable of undertaking projects of this scale. The VA's spending in this area is consistent with broader federal efforts to improve energy efficiency and reduce environmental impact.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). This suggests the scope and scale of the project likely favored larger, established energy service companies with the capacity to manage such extensive facility upgrades. While there's no direct indication of subcontracting requirements for small businesses, it is common practice for prime contractors on large federal contracts to engage small businesses for specialized services, potentially creating opportunities within the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. The firm-fixed-price nature implies performance milestones and deliverables that would be monitored to ensure compliance. Transparency is generally facilitated through contract award databases and reporting requirements. The Inspector General's office within the VA would have jurisdiction to investigate any potential fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Energy Savings Performance Contracts
Federal Energy Management Program
Department of Veterans Affairs Facility Management
Utility Cost Reduction Programs

Risk Flags

Long contract duration
Large contract value
Firm Fixed Price contract type

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $121.8 million to NORESCO, LLC. IGF::CL::IGF - CLOSELY ASSOCIATED - THESE REQUIREMENTS HAVE BEEN DEVELOPED FOR VA VISN 11 TO PUT FORTH GOVERNMENT IDENTIFIED ECM PROJECTS AT VISN 11 FACILITIES TO REDUCE ENERGY CONSUMPTION, WATER CONSUMPTION AND ASSOCIATED UTILITY COSTS, AND ENERGY-RELATED OPERATIONS AND MAINTENANCE COSTS.

Who is the contractor on this award?

The obligated recipient is NORESCO, LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $121.8 million.

What is the period of performance?

Start: 2013-07-18. End: 2022-10-01.

What specific energy-saving technologies or measures are being implemented under this contract?

The provided data does not specify the exact energy-saving technologies or measures. However, typical projects under Energy Savings Performance Contracts (ESPCs) like this one often include upgrades to HVAC systems, lighting retrofits (e.g., LED conversion), building envelope improvements (insulation, windows), water conservation measures, and installation of renewable energy sources. The contract's objective to reduce energy and water consumption suggests a broad application of such measures across VISN 11 facilities. Detailed project plans would outline the specific interventions.

How does the $121.8 million contract value compare to similar energy efficiency projects at other federal agencies?

Comparing the $121.8 million value requires context on the number and size of facilities covered and the scope of work. Large-scale ESPCs can range from a few million to hundreds of millions of dollars. For instance, the General Services Administration (GSA) and the Department of Defense also award substantial ESPCs. Without knowing the exact square footage, number of buildings, and baseline energy usage of the VISN 11 facilities, a direct comparison is difficult. However, the value suggests a significant, multi-facility undertaking aimed at substantial long-term cost savings, which is typical for major federal ESPCs.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Key performance indicators for this contract would likely focus on measurable reductions in energy consumption (e.g., kilowatt-hours saved), water consumption (e.g., gallons saved), and associated utility costs. Other KPIs might include reductions in operational and maintenance costs related to energy systems, achievement of specific environmental targets (e.g., greenhouse gas emission reductions), and successful implementation of project milestones within agreed timelines. The firm-fixed-price nature implies that the contractor is paid based on achieving these pre-defined outcomes.

What is NORESCO, LLC's track record with similar large-scale federal energy efficiency contracts?

NORESCO, LLC is a well-established energy services company with a significant history of performing large-scale energy efficiency projects for federal agencies, including the Department of Defense and the Department of Energy, as well as other government entities. They have a track record of delivering complex projects involving infrastructure upgrades and energy conservation measures. Their experience typically includes managing the entire project lifecycle, from energy audits and design to implementation, commissioning, and ongoing measurement and verification of savings, suggesting they are capable of handling a contract of this magnitude.

What is the projected return on investment (ROI) or payback period for the $121.8 million expenditure?

The projected return on investment (ROI) or payback period is not detailed in the provided data. However, a core principle of Energy Savings Performance Contracts (ESPCs) is that the cost savings generated by the implemented measures are used to finance the project, often over a period of 15-25 years. The government typically does not incur upfront costs, and the contract is structured so that savings meet or exceed the annual project costs. The specific ROI would depend on the baseline energy costs, the efficiency of the implemented technologies, and the contract's financing terms.

How does this contract align with the VA's broader sustainability and climate resilience goals?

This contract directly aligns with the VA's sustainability and climate resilience goals by focusing on reducing energy and water consumption, which are key components of environmental stewardship. By investing in energy efficiency, the VA can lower its operational carbon footprint, reduce reliance on fossil fuels, and potentially enhance the resilience of its facilities against energy disruptions. Such projects contribute to meeting federal mandates for greenhouse gas reduction and energy efficiency improvements across government operations.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 1 RESEARCH DR STE 400 C, WESTBOROUGH, MA, 01581

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $139,074,479

Exercised Options: $121,783,828

Current Obligation: $121,783,828

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $61,997,069

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DEAM3609GO29039

IDV Type: IDC

Timeline